Living Smart: Tankless hot water heaters cost more, but pay off later

For years, traditional gas-powered tank water heaters have been one of the biggest energy hogs in the home. With tank heaters, you have to pay to heat water you aren’t even using.

Not so with a tankless water heater.

“It’s truly an on-demand hot water heater,” said Kyle Whelpley, operations manager for J.F. Denney Plumbing and Heating Inc. in Leavenworth, Kan. “It does nothing until you turn on your hot water. So, when you’re at work, it simply hangs on the wall and doesn’t cost you one penny, compared to a 40- or 50-gallon tank, where, when you’re at work you’re paying for it.”

Tankless water heaters are a fraction of the size of tank systems — roughly the size of a circuit breaker box — and mount to a wall instead of taking up valuable space in the basement or garage.

“Some people really like the fact they have their space back, once they get a tankless installed,” said Rob Evans of Mr. Rooter of Columbus, Ga.

The most popular benefit of a tankless water heater, though, is an almost endless supply of hot water it provides by heating the water via an internal heat exchanger.

“A tankless water heater is designed so that, if you wanted to, you could take a shower from 8 a.m. until midnight at 115 degrees and it won’t move one degree,” Whelpley said. “It’s truly endless hot water.”

Though gas tankless water heaters cost about twice as much as their conventional predecessors — ranging from $2,500 to $5,000 on average — they are easily repairable compared to a tank unit that usually needs to be replaced when it fails.

Tankless heaters last 20 years on average and are more energy efficient, making them more environmentally friendly than the traditional models. Qualifying tankless water heaters are eligible for a $300 federal tax credit. Some utility providers also offer rebates for qualifying purchases.

“A tank water heater lasts about nine years on average,” Evans said. “A tankless generally lasts twice that long. So, even though the initial upfront costs can be quite a bit, over the long haul it’s cheaper because you don’t have to replace the water heater nine years down the road.”

Electric tankless heaters are available as well, but use a lot of power and typically require the electrical service to be upgraded. Electric heaters are best for limited use, such as a small apartment or a point-of-use application like a dedicated sink where you need plenty of hot water.

Tankless water heaters require minimal maintenance, other than periodic flushing to descale them of mineral buildup. A plumber can do that service, typically for about $100 to $150. A handy homeowner can clean the system with vinegar if he or she follows the manufacturer’s recommended guidelines for descaling. It’s also recommended homeowners have a water softener to reduce scale buildup.

“You can tell a difference on ones that have water softeners and ones that don’t have water softeners,” Whelpley said. “When you heat up the water that quickly, you bring the calcium out even quicker.”

Tankless water heaters do require venting and should be placed close to gas lines to operate at their highest efficiency. A licensed plumber who has a good history of working with tankless heaters can help ensure it’s installed correctly and is properly sized to accommodate your family’s needs.

“The biggest thing is to make sure you get somebody that knows tankless and deals with tankless day in and day out,” Whelpley said. “The biggest thing I see is people go to (a big box hardware store) and see a tankless and say, ‘I’ll take that,’ but they don’t know that you have to size it for the house.

“How many shower heads do you have? How many Jacuzzi tubs do you have? If you go buy one off the shelf that’s a 5-gallon a minute when you really need a 9-gallon a minute and you have one person taking a shower in the master bathroom and another person goes to take a shower in the guest bathroom, you won’t have (enough water pressure).”

Angie Hicks is the founder of Angie’s List, (www.angieslist.com) a resource for local consumer reviews on everything from home repair to health care.